When it comes to real estate rentals, consistency is key. That’s why we strongly recommend that landlords rent their properties for the long term, as opposed to short term options like Airbnb or VRBO. A long-term rental is the best way to ensure a steady and reliable income while keeping the costs low. We will cover what a long-term rental period is in terms of the law and why this rental modality is the best for your investment goals.
Tenancy Periods in Alberta
Alberta has two types of rental tenancy agreements:
- Fixed term agreement: it has a specific start and end date, and both the landlord and tenant must adhere to the lease terms until its expiration. Fixed-term leases can be for various durations, such as one year, two years, or shorter periods, depending on what is agreed upon by the landlord and tenant. At the end of the lease term, the parties can decide to renew the lease, sign a new lease, or allow the tenancy to become a periodic tenancy.
- Periodic term agreement: it doesn’t have a specific end date. A periodic tenancy continues indefinitely until the landlord or tenant provides proper notice to terminate the tenancy. Most periodic tenancy agreements are month-to-month but can be year-to-year or week-to-week, depending on the terms the landlord and tenant agree upon.
There are also hybrid tenancies, in which an initially fixed lease extends and turns into a periodic tenancy. A hybrid tenancy is possible, whether through the terms in the tenancy agreement or when the landlord and tenant expressly agree to renew or continue the lease after the end date.
Here are the reasons why we recommend Calgary landlords opt for a periodic tenancy or a hybrid tenancy in case you’re happy with your current tenant.
7 Benefits of Long-Term Rentals for Property Owners
1 – Consistent Income
Long-term rentals typically provide a stable and consistent monthly cash flow. With a more extended lease agreement, owners can count on rent payments for an extended period, reducing income volatility.
2 – Reduced Vacancy Rates
A vacant property only generates expenses. With a long-term lease, you can avoid the hassle of the constant turnover and the associated costs of finding new short-term tenants and prevent the risk of long vacancy periods.
3 – Lower Management and Maintenance Costs
Managing short-term rentals often requires more effort, including frequent turnovers, cleaning, and maintenance. Long-term tenants typically take on more responsibility for minor maintenance and repairs, reducing your workload and expenses.
4 – Less Wear and Tear
Short-term rentals often experience more wear and tear due to the frequent turnover of renters. Long-term tenants are less likely to cause as much damage to the property, resulting in lower maintenance and repair costs over time.
5 – Lower Risk of Negative Reviews
Short-term rentals are more susceptible to negative reviews, which can harm a property’s reputation and impact future profitability. Long-term rentals have fewer occupants and fewer opportunities for negative feedback.
6 – Easier Property Management
Whether you manage one property or several, being a landlord can be time-consuming and stressful. With long-term rentals, you will reduce the time and money you’d need to spend with short-term rentals.
7 – Potential for Stable, Long-Term Relationships
Building a positive and long-term relationship with a tenant can result in reliable rent payments, a well-maintained property, and a sense of trust you can’t have if you rent your property for short periods.
Long-Term Rentals Equals Long-Term Profit
When people invest in a rental property, they have in mind the stable revenue these types of investments are well-known for, and renting for long periods is the best way to enjoy the benefits of being a property owner.
Of course, every owner has different goals and circumstances, and some may find short-term rentals more profitable or suitable, especially in tourist destinations or areas with high demand for short-term accommodation. But in a city like Calgary, where people tend to settle and make their lives, long-term rentals are the best option for landlords.
Finding the perfect tenant is essential to get your property rented for a long time. We have an article that can help you screen and select a high-quality tenant, but the most effective way to ensure you do business with good tenants is to have professionals select them for you.
A property management company has the know-how and the experience to handle tenant screening and everything you need to ensure your property is in good hands and making revenue. Contact us to get a free quote.
